Stocks on freefall, near bear territory

MANILA, Philippines — The Philippine stock market plunged deeper into negative territory yesterday amid worsening fears that the coronavirus disease 2019 (COVID-19) may become a global pandemic.

Yesterday’s bloodbath was reminiscent of Wednesday’s tailspin as global markets including the Philippine Stock Exchange took the cue from Wall Street and experienced a massive selloff as well.

The benchmark Philippine Stock Exchange index (PSEi), the stock market gauge, returned to the 6,700 level, its level in December 2016, plunging by nearly 180 points, or 2.58 percent, to close at 6,787.91. 

Likewise, the broader All Shares index slipped by 85.36 points, or 2.05 percent, to finish at 4,064.32.

Most sectoral indexes ended in the red as well amid heavy selloffs.

Total value turnover reached P11.4 billion. Market breadth was negative with 160 losers and 50 gainers, while 36 issues were left unchanged.

Traders said that other concerns in the domestic front such as regulatory risks that were hounding the country’s water concessionaires were overshadowed by escalating fears that the coronavirus could worsen into a global pandemic.

First Metro Investment Corp. head of research Cristina Ulang said market investors are increasingly growing worried about the spread of the virus.

“Market is pricing in worries about the fast transmission rate of COVID-19 which is raising doubts on whether it is containable at all and whether economic policy responses of governments will be sufficient to avert a global recession,” Ulang said.

Global health authorities have issued warnings that the virus may become a global pandemic, sending jitters across the world.

There are now 82,550 confirmed cases, 2810 deaths and pone possible case of spread in the US.

The US has confirmed its first unknown case of the virus. A woman in California tested positive for COVID-19 but had not traveled to an affected country or likely been in contact with another confirmed case.

This is the first time that the novel coronavirus has spread in the US without a known source of infection.

Luis Limlingan of Regina Capital added that local and international markets remain jittery over the virus.

“Local and international markets did not find any relief on pandemic concerns yet. Italy Government official at noon said 650 confirmed cases of COVID-19 and the governor of California said they now monitoring 8,400 people for coronavirus and cited current testing supplies are inadequate. For the first time, new cases offshore had surpassed that from China,” Limlingan said.

The  statement of the World Health Organizations, saying that this is looking like a global pandemic has added to the selling pressure.

“US Stocks fell from the start and never looked back, chalking up the worse single day loss since 2011 as investors worried the coronavirus may be spreading in the U.S. A slew of corporate and analyst warnings on the virus also dragged down the major averages,” Limlingan said.